Detailed Information on the
Financial Management Service Government-wide Accounting Assessment

Developing the Financial Information Reporting Standardization (FIRST) system in order to better integrate and reconcile budget and accounting data. The Financial Information and Reporting Standardization (FIRST) initiative integrates budget and financial reports from Federal Program Agencies. FIRST will improve the consistency of the budgetary and proprietary accounting data recorded in agency financial statements and reported to FMS through its trial balance. FMS is using a phased development and release approach to the FIRST project. Preliminary database design has been completed and a contract will be awarded in August for the development work. Work will begin on the first release. This project is using a logical, long range approach that attacks the core problems (i.e. intra-gov eliminations and budgetary vs. proprietary data consistency).

FMS is taking significant steps to address the material weaknesses found in the compilation process of Financial Report (FR) of the United States Government, including: ?? Working closely with agencies to reconcile differences between agency budgetary and proprietary reporting that effects the FR. ?? Providing agencies with authoritative data to reconcile inter-agency transfers and other transactions that agencies report to the central accounting system. ?? Using the Chief Financial Officers (CFO) Council, Treasury Reporting Group as a forum to discuss these accounting and reporting issues that affect the FR. ?? Working with the CFO Council and OMB to develop more consistent business rules for intra-governmental transactions. ?? Encouraging greater auditor participation by requiring agency auditors to more closely scrutinize intra-governmental out-of-balance conditions with other agencies. The goal of these actions is to remove the compilation process as a barrier to a clean audit opinion for the FR. FMS will continue to move forward with the two major initiatives which will modernize long standing Federal accounting processes and provide agencies with methodologies and tools to improve the accuracy and consistency of their financial data: The Government-wide Accounting (GWA) Modernization project is a multi-year project which will replace existing government-wide accounting functions and processes. FMS goal is to bring on the maximum number of agencies as soon as possible. We will provide a tool for agencies to phase in GWA processing and use an incremental approach to allow for efficient planning and scheduling of resources and testing in manageable parts. FMS will be working with non-Treasury disbursed agencies to develop a process to allow GWA reporting of Intra-Governmental Payment and Collection (IPAC) transactions, as well as continue to work with FMLoB to implement common government accounting classification. FMS will continue the Financial Information and Reporting Standardization (FIRST) project which will integrate budget and financial reports from Federal Program Agencies and continue with the development for this initiative. FMS will continue working with closely with OMB and Federal agencies to address unreconciled intra-governmental transactions. FMS requires quarterly intragovernmental data from the agencies and compiles reports that match intra-governmental differences for the agencies to better reconcile their accounts. Treasury has taken the lead to eliminate intra-governmental differences resulting from fiduciary transactions and FMS is doing the same for other intra-governmental transaction categories. The results of these efforts have been promising, but will not be verified until the agencies submit their data for the FR compilation process. FMS works closely with the Central Reporting Transformation Team (CRTT) and a sub-group (the Intra-gov Buy/Sell team) to improve the data exchanged between agencies when they enter into a intragov buy/sell transaction.

Developing a baseline for the efficiency performance measure that measures the unit cost to manage one million dollars of cash flow. FMS has developed a baseline for the efficiency performance measure that measures the unit cost to manage one million dollars of cash flow.

Measure: Percentage of Government-wide accounting reports issued accurately.

Explanation:Supports FMS Strategic Goal #4: "Produce accurate, accessible, and timely governmentwide financial information and reports which contribute to improved quality of the Nation's financial decision making."

Measure: Percentage of Government-wide accounting reports issued timely.

Explanation:Supports FMS Strategic Goal #4: "Produce accurate, accessible, and timely governmentwide financial information and reports which contribute to improved quality of the Nation's financial decision making."

Measure: Federal Program Agencies will have simplified and streamlined access to FMS' central (government-wide) accounting information through a single access point.

Explanation:Supports FMS Strategic Goals #4 and #5. FMS Strategic Goal #4: "Produce accurate, accessible, and timely government-wide financial information and reports which contribute to improved quality of the Nation's financial decision making. FMS Strategic Goal #5: Facilitate the achievement of a clean audit opinion on the Financial Report of the U.S. Government through FMS' internal operations and support to Government agencies.

Measure: Unit cost to manage $1 million dollars of cash flow.

Explanation:Using this unit cost measure provides a means to determine the overall efficiency and effectiveness of managing the government's finances.

Measure: All central (government-wide) accounting information will be available within twenty-four hours/one business day of the transaction.

Explanation:Supports FMS Strategic Goals #4 and #5. FMS Strategic Goal #4: "Produce accurate, accessible, and timely government-wide financial information and reports which contribute to improved quality of the Nation's financial decision making. FMS Strategic Goal #5: Facilitate the achievement of a clean audit opinion on the Financial Report of the U.S. Government through FMS' internal operations and support to Government agencies.

Is the program purpose clear?

Explanation: Article 1, Section 9 of the Constitution requires Treasury to report on the financial status of the Federal Government to the President, the Congress, and the American people. In addition, 31 U.S.C. 3513(a) provides, in part, "The Secretary of the Treasury shall prepare reports that will inform the President, Congress and the public on the financial operations of the United States Government." The Government-wide Accounting (GWA) program provides the financial infrastructure for Federal central accounting and reporting, the reconciliation of agency and bank reporting differences, and the generation of regular daily, monthly, quarterly and annual financial reports on the Government's cash and financial position. GWA has the critical responsibility of maintaining the Federal Government's set of accounts and serving as the repository of information about the financial position of the United States Government. In addition, GWA is responsible for the annual compilation and publication of the Financial Report of the United States Government. GWA develops accounting policies and standards, sets reporting requirements, publishes the Treasury Financial Manual, and creates the mechanisms all Federal agencies use to improve the ways in which they manage their accounting and reporting activities.

Evidence: Treasury is mandated by law to provide the Congress, the President, and the public with the accumulation and publication of government-wide financial information and ensure the data integrity of the reports. Article 1, Section 9 of the Constitution states that "??a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time." The Combined Statement of Receipts, Outlays and Balances is an annual report issued by the GWA program that is recognized as the authoritative and official record of the Government's receipts and outlays. The GWA program is also the source of government-wide financial reports that provide information such as: the Federal deficit; the daily cash position of the U. S. Government; the debt subject to limit; and the financial position of the U. S. Government. These reports are not just mandates in law; they provide critical financial information and performance measures of the Federal Government as a whole. GWA's work allows government agencies to handle financial transactions necessary for the measurement and success of their programs and to meet Treasury's goal of managing the government's finances effectively. Additionally GWA activities support two of the government-wide initiatives under the President's Management Agenda - Improved Financial Performance and Expanded Electronic Government.

Does the program address a specific and existing problem, interest, or need?

Explanation: The GWA area allows Federal Government entities to manage their accounting and reporting activities and meet their regular daily, monthly, and quarterly financial reporting requirements. GWA is the sole and authoritative source for balances in the Government's accounts. It is unique in that it reports on the condition of the Federal Government as a whole. GWA provides critical services to the Federal agencies, Congress and the President concerning the financial situation of the United States on a daily, monthly and annual basis. The Monthly Treasury Statement provides senior officials with an economic indicator and provides the Treasury Department the ability to manage the government's cash. GWA's responsibilities include assisting federal agencies with adopting uniform accounting and reporting standards and systems and assuring the continuous exchange of financial information among federal agencies, the Executive Branch's Office of Management and Budget, and financial institutions. Timely and accurate reporting on the financial condition of the Government is essential for the operation of government entities and public confidence. GWA is the sole source for aggregated government-wide data. The Government could not function without this centralized financial and accounting program to provide policy and direction and to satisfy its reporting obligations. Several Government bodies rely on information and reports produced by the GWA program. The Congressional Budget Office uses the information to serve the needs of Congress; OMB uses GWA data to review and monitor the President's budget programs; the Government Accountability Office uses the information to perform audit activities; the various departments and agencies use the data to reconcile their accounts; financial markets rely on the data for economic analyses and market decision; and the public uses the reports to review the operations of their Government.

Evidence: FMS oversees and accounts for a daily cash flow in excess of $50 billion. At all times, but most visibly when there is a debt ceiling crisis, the accuracy and timeliness of GWA's financial information is essential for the financial integrity of the Government. GWA meets with other Federal Agencies throughout the year to discuss upcoming impacts on accounting and financial systems and to identify how GWA can streamline agency reporting. These meetings are conducted through speaking engagements at agency and government conferences, one-on-one meetings, and through on-going training.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: FMS' Government-wide Accounting (GWA) Program has sole responsibility for maintaining the Government's accounting books, accumulating and publishing all the government-wide financial information, ensuring the data integrity of the information, and providing critical services to Federal agencies and Congress concerning the financial condition of the United States on a daily, monthly and annual basis. In addition, GWA is the only organization in the Federal Government that: provides centralized cash management; accurately maintains the central accounting system to track agency spending authority by account; accurately maintains the cash position of the U. S. Government; and provides authoritative accounting guidance to Federal agencies. The program also develops accounting policy and standards, sets reporting requirements, and creates the mechanisms all Federal Government agencies use to improve the ways in which they manage their accounting and reporting activities.

Evidence: FMS oversees and accounts for a daily cash flow in excess of $50 billion. Reporting related to cash receipts and disbursements flows to GWA from approximately 1600 reporting stations around the world. Similarly, classification of receipts and disbursements and intra-governmental activity flows to FMS from around the world. At headquarters, the GWA program processes certain transactions based in law, such as appropriation warrants and non-expenditure transactions. All this data flows into GWA's central accounting system, the primary tool for one of FMS' primary missions, maintaining the Government's accounts. There is no other place in Government where this can happen. In addition, GWA has worked diligently with OMB and program agencies to reduce duplicative reporting and the related unnecessary and resource-intense reconciliations. At year-end, GWA has been able to consolidate one FMS system and two OMB systems into one joint system that satisfies GWA's central accounting needs and populates the prior-year column of the President's Budget with the same data stream from Federal program agencies. Not only has the accuracy and consistency of agency data been dramatically improved, the need for reconciliations has been almost completely eliminated. These improvements are directly related to two items in the President's Management Agenda: Improved Financial Performance and Expanded Electronic Government.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: To accomplish the program objective of providing the financial infrastructure for Federal central accounting and government-wide reporting, the reconciliation of agency and bank reporting differences, and the generation of regular daily, monthly, and quarterly financial reports, GWA stays abreast of changing technologies to further improve the responsibilities of the GWA program. Ongoing initiatives which technologically and functionally upgrade the accounting tools used in performing the GWA responsibilities, such as the GWA Modernization Project, will dramatically improve the process federal agencies use to meet their reporting and accounting requirements. The central accounting system is the unquestioned authoritative source for agency spending authority by account and the source of well known statistics such as the Federal deficit.

Evidence: The design and flexibility of the GWA program has enabled it to accomplish the following: 1) The ability of agencies to classify receipts and disbursements to the correct fund symbol within seven days of the end of the month has been reduced to three. Today, almost all (> 98 percent) are classified by the end of the third work day. 2) The acceleration of the preparation of the Financial Report of the U. S. Government from March 31 to December 15 in the last four years, and reports detailed statistics on unreconciled elimination differences, unreconciled transactions, and other measures. 3) Errors in agency account balances, as measured by Statements of Difference (SOD) and reported to the Fiscal Assistant Secretary monthly, have been dramatically reduced From October 2003 through September 2005, the number of SODs was reduced by 79 percent, representing a dollar value of $219 million. 4) Allow FMS to consistently receive a clean audit opinion on the Government's cash account. 5) Provide FACTS II data on Outlays to OMB in a more expedited basis. 6) Produce the Daily Treasury Statement, Monthly Treasury Statement, Combined Statement, and Treasury Bulletin on time and accurately 100 percent of the time. In addition, the release of the Monthly Treasury Statement has been accelerated from the 14th work day of the month to the 8th work day of the month over the last two years. With the implementation and full rollout of the GWA Modernization Project, FMS will attain one of its long range strategic performance goals of providing all central (government-wide) accounting information within twenty four hours/one business day of the transaction, while reducing redundant reporting and burdensome, labor intensive reconciliations.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Resources appropriated to the GWA program are used effectively to assist Federal Agencies, the public, Congress, and the President in their management decisions. The scale and scope of the global government-wide accounting activities that the GWA program supports allows Federal Agencies and the public to receive financial and accounting data; receive daily, monthly and annual reporting; and utilize the tools necessary to meet their financial responsibilities. GWA has made significant improvements in recent years that provide Federal program agencies with critical financial information in a more timely manner and in an easy to use format.

Evidence: The GWA Account Statement provides agencies with an easy-to-use bank statement type report that contains easy to find information on transactions and balances in their accounts. Currently, agency users can see the impact of appropriation warrants and non-expenditure transactions the morning after they are processed. The non-expenditure transactions are processed through a new Internet application. The result is that program agency personnel can see the flow of these transactions in less that 24 hours, when just a few years ago it took weeks for the same information to get out through the mail. A long range plan is in place to modify a string of feeder systems to allow program agency users to see the flow and balances of all transactions the next day via the Account Statement. This type of reporting will allow agencies to know the status of their funds and therefore improve the management of their activities. In the meantime, before these long range initiatives come on line, GWA, working with the agencies, has been able to accelerate agency reporting to FMS and the corresponding FMS reports to agencies by several days. In FY 2005, almost all (> 98 percent) agency reporting stations classified receipts and disbursements to the correct fund symbol within three days after the end of the month close -two years ago this took an average of eight days. This has provided the opportunity for FMS to send out trial balances and undisbursed ledgers on the 8th work day when it used to be the 14th. For agencies using the Account Statement, accurate data is usually available on the 4th work day. GWA is the only source for this type of information, and has acted in a manner that provides immediate benefit to the users of the information while moving toward an integrated long range plan.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The GWA program's long-term performance measures are: 1. Federal Program Agencies will have simplified and streamlined access to FMS' central (government-wide) accounting information through a single access point. 2. All central (government-wide) accounting information will be available within twenty-four hours/one business day of the transaction. The two long-range performance measures listed are directly tied to the FMS goal of "produce accurate, accessible, and timely government-wide financial information and reports which contribute to improved quality of the nation's financial decision making." The single access point refers to both the submission of accounting data to FMS by Federal Program Agencies and the availability of financial information and underlying transaction data to program agencies. For example, agencies will be able to access their Fund Balance with Treasury at a summary level and then "drill down" to view a collection or disbursement transaction at the detail level through the new GWA system. This information will be near real time as agencies can access this data one day after the initiation of the transaction. Progress on the long-range performance measures is dependent on a phased consolidation of individual applications and the implementation of new technologies that permit a user to access multiple authorized systems through one portal. FMS is currently in the process of updating its Strategic Plan, and plans to complete a systematic examination of the GWA long-term measures.

Evidence: Financial Mangement Service Strategic Plan for Fiscal Years 2003-2008.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: GWA's two long-term measures are expected to be completed in the year 2010. GWA has made incremental progress in achieving these goals by providing new services and accelerating the availability of information on a phased basis. However, the redesign of the government-wide central accounting system is an extremely complex undertaking as it impacts every Federal Agency and requires modifications to numerous feeder systems that collect disbursement, collection and intragovernmental transactions. The expected results will provide agencies more timely access to more useful and accurate information that can be used to make decisions and measure program results. These initiatives fundamentally change the way Federal Agencies have done their accounting and reporting to Treasury for almost 50 years.

Evidence: GWA has made progress in accelerating the availability of information and is continuing to implement plans to reduce the number of access points, speed the delivery of information, and increase its accuracy. GWA put the Account Statement into production in October, 2003. This provides agencies with an easy to use bank-like statement on the Internet that provides important information about an agency's account, such as Fund Balance with Treasury. GWA has also built Internet-based applications for processing non-expenditure transfers and warrants, greatly reducing processing and notification time. GWA has helped make it possible for agencies to do monthly reporting by the third work day of the month, and has accelerated production of the Monthly Treasury Statement from fourteen business days after month end to eight business days. GWA's Intra-Governmental Payment and Collection (IPAC) system has been modified to allow classification to account symbol and business event type. The modification will be implemented in 2006 and is the first feeder system modified to do business using this new methodology. The most dramatic example of improved timeliness of reporting is the fact that the GWA program produced the Financial Report of the U. S. Government on December 15, 2004 and again on that date in 2005, 75 days after the close of the fiscal year.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The GWA program's annual performance measures are 1) percentage of Government-wide accounting reports issued accurately; and 2) percentage of Government-wide accounting reports issued timely. The goal for both of these measures is 100 percent and FMS has met these goals all but one year (FY 2003 had 98 percent accuracy). Accuracy refers to there being no errata in any of the published Government-wide financial information. Timeliness refers to the ability of reports to be processed by FMS within the established standard range (e.g. the Monthly Treasury Statement is to be published the eighth business day after month's end). The unit cost to manage $1 million dollars of cash flow is GWA's new efficiency measure, which was implemented as part of the FY 2007 budget. The GWA program reports the results of these annual measures to the Department and OMB on a quarterly basis. The measures are related to agency reporting of receipt and disbursement information. The program has also recently developed an efficiency measure utilizing Activity Based Costing to track the costs of Federal financial management.

Evidence: The annual performance measures have been included in the FMS Congressional Justifications since FY 2001. Some of the reports that are covered by these measures are: The Daily Treasury Statement (cash position, public debt outstanding); the Monthly Treasury Statement (total receipts and outlays, deficit/surplus); the Combined Statement of Receipts, Outlays and Balances; and, the Treasury Bulletin. In addition, the GWA program has other operational measures such as: 1) number and amount of differences related to deposits, disbursements, and check issues; and, 2) timeliness of agency monthly classifications of receipts and outlays to correct fund symbols. These measures are tracked monthly and reported to senior management.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The GWA program has a target of 100 percent for its annual performance measures of (1) percentage of Government-wide accounting reports issued accurately; and (2) percentage of Government-wide accounting reports issued timely. These targets can not be set any higher and exemplify a strong management commitment toward the continued success of the program. In addition, a new efficiency measure for the cost of managing $1 million of cash flow was added in FMS' FY 2007 budget, using FY 2005 data as a baseline. Although FMS can not control cash flow, it is committed to controlling all program costs to meet this target. These reports, when considered over time, show continued improvement. GWA receives information from every federal agency and from reporting stations around the world. It has asked these reporters not only to speed their reporting by significant amounts, but also to increase their accuracy.

Evidence: Government-wide accounting reports include the Daily Treasury Statement, Monthly Treasury Statement, Combined Statement, Treasury Bulletin and Financial Report of the United States Government. These reports are used by numerous government bodies, including the Congressional Budget Office, the Office of Management and Budget, and individual departments and agencies. In issuing these reports, FMS has continually accelerated the time frame while maintaining the accuracy of the data. Federal Program Agencies have accelerated their monthly classification of receipts and disbursements significantly and GWA has streamlined its internal workflows to process data in a more efficient manner. The combination of these actions has allowed GWA to accelerate the production of the Monthly Treasury Statement from the 14th business day to the 8th business day. GWA's Statement of Difference (SOD) is a tool used to oversee the checks and balances over the Federal government's cash transactions. The SOD highlights discrepancies between the amounts reported centrally by agencies and amounts reported by the financial institutions for the same transactions. GWA implemented a new process to monitor these differences and has reduced the timeframe for measuring "acceptable" out-of-balance conditions from six months to three months. Since GWA instituted these processes, the number of differences has been drastically reduced. Just for the period of time from October 2003 through September 2005, the number of SODs was reduced by 79 percent, representing a dollar value of $219 million. Over the past 3 years, FMS has accelerated the opening and closing of the FACTS II window to more closely align the budgetary reporting windows with the Financial Reporting windows. FMS has accelerated the opening of the FACTS II window by 6 business days and the close of the FACTS II window by 10 business days. FMS plans to change its process for FY 2006 to further accelerate the opening and closing of FACTS II window by 3 business days.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: GWA's primary partners are Federal Program Agencies (FPAs). They have worked diligently in partnership with FMS to improve the accuracy and timeliness of their reporting. Some of the most dramatic and visible improvements in Federal financial management have occurred in areas directly related to GWA operations.

Evidence: Beginning in 2001, the timeliness of Federal financial reporting received increased emphasis. FMS, working with FPAs, has improved the timeliness of monthly reporting of receipts and disbursements from seven work days to three work days. The quality and accuracy of this reporting, as measured by Statements of Difference and reported monthly to the Fiscal Assistant Secretary, has also increased dramatically. In addition, the Financial Report of the U. S. Government, which was released on March 31st for FY 1997 - FY 2002 and February 28th for FY 2003 has been released on December 15th for fiscal years 2004 and 2005. None of these advancements could have been done without the support of these agencies. Agencies' increased accuracy of reporting has resulted in a large reduction in supplemental reports and adjustments. This means that the data available in the GWA Account Statement on the 5th work day of the month is the final data for most Treasury account symbols. Just a few years ago, agencies could not get this information until the 14th work day of the month. GWA measures timeliness of: undisbursed ledgers and trial balances; accuracy and timeliness of Statements of Difference; timeliness of agency monthly reporting; and, accuracy and timeliness of outbound reports including the Daily Treasury Statement, the Monthly Treasury Statement, and the Combined Statement of Receipts and Outlays.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Independent evaluations of GWA operations are conducted by a number of organizations at various levels. The Treasury IG, usually through a independent contractor, audits the cash position of the U. S. annually. FMS also contracts with specialist organizations to review security documentation of GWA systems. GAO audits the Financial Report of the U. S. Government each year. GWA uses independent contractors as well as internal resources to support Certification and Accreditation activities. These activities include risk assessment, FIPS 199 assessment, vulnerability scanning and penetration testing, as well as manual automated testing. FMS' Management Controls Branch tracks progress on corrective actions reported out of the multiple reviews. GWA also conducts annual evaluations and assessments of its systems and internal controls as part of the FMFIA/FFMIA assurance and compliance process. FMS also has an integrated evaluation, planning and budgeting process to ensure ongoing feedback and improvement. Based on independent reviews and audits, GWA has made significant changes in the areas of systems documentation, access controls and re-certifications, and configuration management.

Evidence: GWA has received a clean audit opinion on the Government's cash position (which totaled $43 billion at the end of FY 2005) since the audits began in 1997. Audits of the Financial Report of the U. S Government (FR) by the Government Accountability Office (GAO) began with the FY 1997 report as required under the Government Management Reform Act of 1994. The FR has received a disclaimer opinion since 1997. The material weaknesses associated with this report are related to the quality of information supplied to GWA by Federal Program Agencies, the compilation, and consolidation process used by FMS to prepare the FR and intragovernmental reporting. GWA is actively working in all three areas. Through participation in inter-agency work groups, GWA is working to provide better accounting guidance to agencies, and more targeted central accounting data to help agencies improve the consistency of their reporting, especially in the area of intragovernmental transaction reporting. GWA has aggressively presented the case to the Federal Accounting Standards Advisory Board (FASAB) that some standards meant for program agencies are not applicable to the FR. Approval for relief from these reporting requirements is expected this summer, and will reduce the number of GAO findings. Finally, GWA has made significant changes to the FR consolidation process, improving internal controls, documenting standard operating procedures, and performing more of the processes within the tightly controlled reporting and consolidation system. All GWA systems operate under full Certification and Accreditation, following a NIST 800-37 compliant process. This process addresses all pertinent IT security controls (technical, management and operational) through an independent review and certification. All corrective action plans based on audits or reviews are tracked and monitored on a monthly basis. Recent GWA actions based on those reviews include: strengthening the user re-certification process; requiring password changes every 90 days; and improving the change control process.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: FMS' budget is fully aligned by program activity, including the GWA program, and is tied to the purposes and strategic goals of the program. The budget request includes amounts associated with the direct Federal FTE that support the program.

Evidence: FMS' annual budget request clearly indicates the full cost of achieving performance goals. GWA is heavily dependent on discretionary appropriations as the source for development and implementation of new initiatives, and out of necessity maintains detailed records and works closely with FMS Budget Division to link FTE costs to specific components of the GWA business line (budget reporting, financial reporting, and cash reporting). This data and other information are used as part of the budget deliberation process to project future strategic goals, performance measures, and targets.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: GWA has refined and strengthened its internal performance measures significantly. These measures provide detailed information about the amount and types of resources that are used to perform particular tasks in GWA. This information about the "current" state can be used to make decisions about the "desired" state. GWA has also taken steps to incorporate the costs that have been incurred by support organizations and allocated to GWA so full costs can be used in making management decisions. GWA has compared expected future activities to current skill sets to determine gaps. In the last two years, most GWA project managers have obtained their project manager credentials from the Project Management Institute, and more will do so in 2006. GWA is also improving its analytical capabilities and increasing the numbers of Information Systems Security Officers. GWA has developed a long-term strategy that will address many of the issues related to the audit opinion on the Financial Report of the U. S. Government.

Evidence: FMS is building and implementing systems to improve the exchange of financial information among FMS, FPAs, OMB, and the banking community and improve the consistency of agency financial information. Once completed, the Government-wide Accounting (GWA) Modernization Project will comprehensively replace current Government-wide accounting functions and processes that are both internal and external to FMS. It will improve the reliability, usefulness, and timeliness of the Government's financial information, provide FPAs and other users with better access to that information, and will eliminate duplicate reporting and reconciliation burdens by agencies. In addition, FPAs will have better tools for reporting financial information and access to daily account statements for monitoring the status of their financial information at the Treasury. GWA will be able to provide more useful and timely feedback to Federal Program Agencies that will help them down the path to improved accounting, reporting, and financial management. It also moves FMS' GWA program to become a more analytical organization rather than a data collection organization, using modern technology to do the routine work. All GWA initiatives and operations are tied to FMS' Strategic Plan, the Treasury Department's Strategic Plan, and the President's Management Agenda.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Performance information is tracked daily, monthly, quarterly, and annually using a consistent methodology. This information directly relates to the key annual and long-term performance measures and includes information from Federal program agencies which are our key partners. The data is analyzed, reconciled, and distributed to program and senior management to track the performance measures and set future metrics. It is also used to help manage the program's progress toward improving the quality and timeliness of Federal financial information.

Evidence: GWA prepares regular operational and management reports that measure: 1) Timeliness and accuracy of the issuance of the Daily Treasury Statement and the Monthly Treasury Statement; 2) Number and amount of differences related to deposits, disbursements, and check issues; 3) Timeliness of agency month-end reports on receipts and outlays; and, 4) Timeliness and accuracy of GWA outbound reports for agency use. With this collected performance information, GWA has been able to accelerate the publication of the Monthly Treasury Statement from the 14th to the 8th workday of each month. In the last three years, GWA has accelerated agency reporting form 7 business days to 3 business days. In addition, GWA has accelerated the preparation of the Financial Report of the U. S. Government from March 31 to December 15 in the last four years, and reports detailed statistics on unreconciled elimination differences, unreconciled transactions, and other measures. Monthly letters are sent by the GWA program to agency Deputy Chief Financial Officers providing information on their progress in reconciling their Fund Balance with Treasury and resolving statements of difference in their accounts. A performance scorecard is also sent to each major agency providing feedback on the submission of their financial statement closing package, including the timeliness and accuracy of their submissions, the consistency of their data, and the elimination of intragovernmental transaction differences with their trading partners.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: FMS managers are held directly accountable for all program results. Contractors and Federal Reserve Banks that support the development of new GWA initiatives operate under service level agreements, with financial penalties, tied to performance standards. Contracts are performance-based statements of works.

Evidence: Specific performance and schedule targets are included in the annual performance plans of GWA managers. Agreements with contractors and Federal Reserve Banks hold them financially liable for the timeliness and accuracy of meeting business requirements and other deliverables. FMS does hold the Federal Program Agencies responsible for the validity, accuracy, and timeliness of their accounting reports. As part of the Monthly Treasury Statement process, FMS contacts program agencies when reporting errors exceed our data integrity threshold. In those instances, agencies are required to submit corrected or supplemental month-end reports. Agency budget execution reporting through FACTS II must pass strict edits to ensure the integrity of the data before it is passed along for further processing and submission to OMB. For financial reporting on the Financial Report of the U.S. Government, FMS issues specific performance letters to the Chief Financial Officer and Inspector General of each of the major program agencies.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: GWA is funded through appropriations for annual salaries and expenses, which covers the staffing costs for the programs and follows a predictable spending pattern for annual obligation. GWA is also funded through permanent and indefinite appropriations for development costs of new GWA Project initiatives performed by the Federal Reserve Banks (FRB). Based on this indefinite funding, timing of obligations for FRB work is not related to a fiscal year. All obligations supporting GWA are tied to meeting our strategic goals and long-range measures. In addition, the new annual efficiency measure on the unit cost to manage one million dollars of cash flow will provide another tool for ensuring that funding is utilized in a responsible manner.

Evidence: During FY 2005, FMS' GWA program obligated 98 percent of its target annual appropriation. Funds are obligated timely with no history of anti-deficiency. FMS Budget Division reviews commitments and obligations to ensure they are accomplished timely and within the appropriate project code. The GWA program maintains its own staff dedicated to ensuring that funds are obligated timely and for the intended purpose. Use of the permanent and indefinite appropriations is restricted to paying only fiscal agents, which in turn are restricted in role to providing only services related to development of the GWA initiatives, guaranteeing that all program funds are used only for the intended purpose (See 12 USC §§391a and 5018 Note, Pub. Law No. 108-199, Div. F, Title II, §§ 218).

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: GWA uses a variety of procedures to promote efficiency and effectiveness, including competitive selection of contractors. However, while FMS has unit cost, timeliness and accuracy measures in its internal and external performance reporting which are used to manage for improved efficiency, at the time of this PART evaluation, a baseline for the new unit cost measure has yet not been established. GWA has been undergoing significant IT improvements to accomplish goals of efficiency and cost effectiveness in program execution. The GWA program, like all of FMS, is subject to IT architecture reviews and requirements to regulate investment and program decisions. New programs go through a rigorous review by FMS' investment review board to ensure a sound business case is made before proceeding with any information technology investments. Contractors and Federal Reserve Banks that support the development of new GWA initiatives operate under service level agreements with financial penalties tied to performance standards.

Evidence: See the performance measure section of this PART evaulation. GWA has implemented new internet-based tools to allow more efficient and effective reporting of accounting information to and from Federal Program Agencies (FPA). These improvements have provided for quicker turn-around times, while allowing sufficient time for FMS analysis and FPA reconciliation. Various GWA applications are being consolidated into one database, one platform, and sharing common components to achieve efficiency and cost effectiveness. In rare cases where contractors have not met expectations, financial penalties were invoked. GWA's Statement of Difference (SOD) is a tool used to oversee the checks and balances over the Federal government's cash transactions. The SOD highlights discrepancies between the amounts reported centrally by agencies and amounts reported by the financial institutions for the same transactions. GWA implemented a new process to monitor these differences and has reduced the timeframe for measuring "acceptable" out-of-balance conditions from six months to three months. Since GWA instituted these processes, the number of differences has been drastically reduced. Just for the period of time from October 2003 through September 2005, the number of SODs was reduced by 79 percent, representing a dollar value of $219 million. Over the past three years, FMS has accelerated the opening and closing of the FACTS II window to more closely align the budgetary reporting windows with the Financial Reporting windows. FMS has accelerated the opening of the FACTS II window by six business days and the close of the FACTS II window by ten business days. FMS plans to change its process for FY 2006 to further accelerate the opening and closing of FACTS II window by three business days.

Does the program collaborate and coordinate effectively with related programs?

Explanation: GWA interfaces and supports every Federal Program Agency in collecting and disseminating central accounting and financial reporting information. It requires collaboration at the program, technical, and management levels across the Government. It employs a variety of mechanisms to foster coordination, including joint planning, interagency agreements, direct technical integration, cost sharing, work sessions, and joint conferences and training sessions. In addition, GWA is closely integrated with FMS' payments and collections programs.

Evidence: Customer Federal agencies participate in the requirements documentation of GWA initiatives which are geared to improving the accounting and reporting processes. The GWA Project staff has a lead Agency Liaison, whose main responsibility is to ensure collaboration and coordination with FPAs. GWA also has an Executive Steering Committee to ensure collaboration and coordination among other FMS program areas, as well as a Management Steering Group to ensure the same effective relationships with its other partners and fiscal agents. Ideas for improving the Financial Report of the U.S. Government were sought from the Government Accountability Project at the Mercatus Center at George Mason University and from the Partnership for Public Service. Roundtables have been held with Congressional staff, public accounting professionals, analysts from credit rating agencies, economists, and interested members of the public to ask their advice on possible report improvements. GWA has also taken a leadership role in the CFO Councils Acceleration Committee, providing agencies with suggestions to streamlining processes and answering questions. FMS works closely with Treasury's Office of the Fiscal Assistant Secretary as well as the Office of Management and Budget on policies and procedures related to accounting and reporting issues. GWA also works closely with numerous other FMS organizations and Federal Reserve Banks on system development efforts for applications that are feeder systems to the central accounting system.

Does the program use strong financial management practices?

Explanation: Currently, the Financial Report of the U.S. Government does not receive a clean audit opinion as a result of three material weaknesses, two of which are related to agency reporting beyond FMS' direct control, and one on the compilation process. FMS has identified the weaknesses and has put in place an action plan to resolve them. All GWA systems meet statutory requirements on financial management and provide financial information timely and accurately to FMS and agencies government-wide. FMS's Program Integrity Division conducts internal reviews of the GWA program as required by FMFIA and FMS' Five Year Management Control Program. The GWA program is considered part of the Federal Government's critical infrastructure, and the program's strong financial management practices is essential to hundreds of other Federal programs in managing the Federal Government's cash and tracking the Federal deficit.

Evidence: GAO audit of the Consolidated Financial Statements of the U.S. Government. On it other GWA activities, FMS consistently receives an unqualified audit opinion on the Schedule of Non-entity Assets, Non-entity Costs, Non-entity Custodial Revenues, and the Schedule of Non-entity Government-wide cash. IT audits, 300B audits, continuity of operations reviews, and other program reviews are routinely performed on the applications developed to support the Government-wide accounting mission. Accounting and reporting are done timely and accurately, most through automated procedures. Numerous edit checks, validations, and reviews are conducted on the data and processes involved in the compilation of the Monthly Treasury Statement, the Treasury Combined Statement, and the Financial Report of the U.S. Government.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: FMS aggressively identifies and corrects deficiencies in the GWA program through regular internal management reviews and reviews conducted by numerous independent parties. GWA has been actively seeking better information about deficiencies, so as to more effectively react and correct them such as creating performance measures at lower levels of detail, obtaining costs of processing cash flows, and calculating and analyzing fully allocated costs. FMS is also requiring greater detail from agencies and has developed a new tool to track imbalances, identify where the problem exists and provide better analysis of the data. FMS continues to meet with GAO regularly to discuss findings and recommendations in detail. The GWA program is also working diligently to address its one material weakness related to the compilation of the Financial Report of the U.S. Government.

Evidence: FMS continually reviews the GWA program and its components and seeks to strengthen and improve where necessary. GWA maintains a business continuity plan, which includes testing of components, fail over processes, and back ups. The Treasury Financial Manual and Standard Operating Procedures are continually updated for both internal and external processes. Additionally, the GWA program is taking steps in an attempt to address the material weaknesses found in the Financial Report of the U.S. Government, including: 1) requiring greater detail from agencies while developing tracking tools that can be used determine problem area and to better analyze the gathered data; 2) partnering with OMB to develop reports that show inter-agency transfers throughout the government; 3) using the Chief Financial Officers Council (CFO) as a forum to discuss these accounting issues; 4) working with the CFO Council to develop more consistent business rules for intergovernmental transactions; and, 5) encouraging greater auditor participation by requiring agency auditors to review their out-of-balance conditions with other agencies. FMS is continuing to undergo a major shift from routine transaction processing to highly complex analytical reviews of data and information relating to trend analysis, comparative analysis and error resolution. This is a result of the increased responsibilities for analyzing agency financial statements and other complex accounting information. It is also a result of the changes that will take place in how agencies will report their budgetary accounting data for the new government-wide accounting systems. This change is most pronounced in the government-wide accounting program, and emphasizes the shift from routine transaction processing to data analysis and customer relationship management. These changes requires FMS to move away from performing routine functions at the accounting technician level to conducting more complex, value-added analytical work with new accountants, systems accountants and financial management specialists. To address this change, during FY 2004 and FY 2006 FMS was granted authority for a buyout to assist in restructuring the GWA program to more adequately address the changing needs of the program and its customers.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: To make transaction information available to agency users within 24 hours of processing, GWA must change current procedures so that all transactions include fund symbols and business event type codes as they are processed. This eliminates the two-tiered reporting process in place now. It requires all payment, collection, and intra-governmental systems to capture these two pieces of data. This is a large cooperative effort that involves all the major business lines in FMS to build the systems and all federal programs agencies to send FMS the data. GWA has been heavily involved in coordinating efforts throughout FMS and in agency outreach programs. It also requires the development of an informative and easy to use mechanism for agencies to access their data. FMS has made significant progress in both areas. The Account Statement is the mechanism for access, and it has been in place for over a year. The first release of the first feeder system will go into production in December, 2006.

Evidence: GWA has initiated a multitude of efforts designed to meet its long term goals, such as: 1) Automation of the Warrants, Non Expenditure Transactions, and Borrowings; 2) Acceleration of the month-end reporting for agencies from 7 business days to 3 business days; 3) Acceleration of the release of the Monthly Treasury Statement from 14 business days to 8 business days; and 4) accelerated the opening and closing of the FACTS II (budgetary reporting) window by 6 and 10 business respectively over the last three years, with a further acceleration of 3 business days planned for FY 2006. GWA has made available the GWA Account Statement for agency use since October 2003. It looks like a bank statement and is particularly easy to use. It offers download capability for agencies to read data into their systems. Most items are not updated daily as yet, but as the feeder systems come on-line, the Account Statement will be updated daily while retaining the same look. As each feeder system converts to capture the necessary information, the Account Statement will come closer to meeting our 24 hour target. Intragovernmental Payament and Collection System (IPAC) is the first such feeder system to go into production. This capability is scheduled for March 27, 2006, with agency use to begin in December, 2006. Other feeder systems will follow at regular intervals. When all payment, collection, and debt collection feeder systems contain fund symbol and transaction type information, agencies will use the Account Statement to see their data within 24 hours. Additionally, the cash account of the U.S. Government has received a clean audit opinion since the audit of this account began in 1997.

Does the program (including program partners) achieve its annual performance goals?

Explanation: Over the last five years, with only one exception (FY 2003 had 98 percent accuracy), the GWA program has consistently met its annual performance goals related to the timeliness and accuracy of financial reports issued by FMS. GWA also maintains a number of internal operational measures, such as: 1) Number and amount of differences related to deposits, disbursements, and check issues; and 2) Timeliness of agency monthly classifications of receipts and outlays to correct fund symbols. GWA intends to use the success in these measures to move towards the program's long-term goals.

Evidence: FMS' annual performance measures are: 1) The percentage of Government-wide accounting reports issued accurately; and 2) The percentage of Government-wide accounting reports issued timely. These include government-wide accounting reports such as the Combined Statement, the Daily and Monthly Treasury Statements, and the Treasury Bulletin. The GWA program met the 100 percent timeliness goals in each of the last five fiscal years. For the accuracy goal, the 100 percent target was met in four of the last five fiscal years with the exception being in FY 2003. Source: Fiscal Year 2007 Congressional Justification. Agency reporting continues to improve, while speed of reporting increases. The number of reporting locations with reconciliation differences for deposits and payments less than three months old has declined steadily in the last few years, with the number of SODs reduced by 79 percent from October 2003 through September 2005, with a dollar value of $219 million. In addition, GWA received an unqualified audit opinion on FMS' Schedule of Non-entity assets, Non-entity Costs, Non-entity Custodial Revenues, and Schedule of Non-entity Government-wide cash. GWA has recently implemented as part of the FY 2007 budget a new efficiency measure, cost to manage $1 million dollars of cash flow.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: At the time of this PART evaluation, FMS had not yet established a baseline for its new efficiency measure - - "Unit Cost to Manage $1 Million Dollars of Cash Flow." Over the last several years, the GWA program has made system, operational and business process improvements that have improved the timeliness of agency and FMS reporting, reduced the number and dollar amount of account differences and improved the accuracy and integrity of our accounting information. GWA has been able to build increasingly complex systems and meet the increased reporting requirements of security and governance without substantial dollar increases or any increases in FTEs.

Evidence: See the performance measures section of this PART evaluation. FMS has undertaken significant efforts to modernize its central accounting and reporting processes by re-examining the reporting methodology and mechanisms, consolidating applications onto common platforms, incorporating new technologies and making full use of the internet. The web-based GWA Account Statement replaces the Undisbursed Reports, providing a more timely and user-friendly system with more efficient and effective security. These modernization efforts have allowed FMS to: 1) Eliminate paper processing of warrants, Non-Expenditure Transfers (NETs) and borrowings; 2) Implement the 3 day month-end reporting with no reduction in accuracy or reliability; 3) Plan for the elimination of the undisbursed ledgers in June 2006; 4) Reduce the intra-governmental elimination differences from $247 billion in 2004 to $100 billion in 2005; and 5) Reduce the time allowed for agencies to resolve Statements of Difference from 6 months to 4 months and then to 3 months, and the number and dollars of differences have dropped from 90 percent differences of 4 months or less to 90 percent differences of 3 months or less in 2005. The long term goal of the GWA system will be to eliminate month-end reporting and enable agencies to balance their Fund Balance With Treasury (FBWT) on a daily basis.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The closest comparable entities are foreign governments. Meaningful head-to-head performance comparisons, even with private sector or state governments, are difficult due to unique Federal laws, the unique missions of government-wide central accounting and reporting, and the unequaled scale and scope of the FMS government-wide accounting process. Nevertheless, available data indicate that no other entity does better than FMS in accounting for payments, collections and intra-governmental transactions in either timeliness or accuracy.

Evidence: FMS' Government-wide Accounting (GWA) Program has sole responsibility for maintaining the Government's accounting books, accumulating and publishing all the government-wide financial information, ensuring the data integrity of the information, and providing critical services to the Federal Agencies, and Congress concerning the financial situation of the United States on a daily, monthly and annual basis. As the government's financial manager, FMS oversees a daily cash flow in excess of $50 billion. In addition, the GWA program is the only organization in the Federal Government that: provides centralized cash management; maintains the central accounting system to track agency spending authority by account; maintains the cash position of the U. S. Government; and provides authoritative accounting guidance to federal agencies. Federal Program Agencies have accelerated their monthly classification of receipts and disbursements significantly. GWA has streamlined its internal workflows to process data in a more efficient manner. The combination of the two has allowed GWA to accelerate the production of the Monthly Treasury Statement by about one week. This publication contains the official surplus/deficit numbers. Agencies increased accuracy of reporting has resulted in a large reduction in supplemental reports and adjustments. This means that the data available in the GWA Account Statement on the 5th work day of the month is the final data for most Treasury account symbols. Just a few years ago, agencies could not get this information until the 14th work day of the month. Accuracy levels have actually improved during this period as measured by statements of difference on agency reports. The GWA program measures the timeliness of undisbursed ledgers and trial balances; accuracy and timeliness of statements of difference; timeliness of agency monthly reporting; and accuracy and timeliness of outbound reports including the Daily Treasury Statement and Monthly Treasury Statement and the Combined Statement of Receipts and Outlays. The Financial Report was issued within 75 days after close of fiscal year and within one month of receiving agency data - this is better than most private sector companies. Canada's Fiscal Year 2004-2005 Financial Report was not issued until six months after the end of the fiscal year.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Program components have had numerous GAO, OIG, and independent third party reviews, which validate the effectiveness of the program and its ability to provide timely and accurate information on the Government-wide cash position and Government-wide accounting reports. FMS' Management Controls Branch conducts internal reviews of the GWA programs as required by the FMFIA and FMS' five-year management Control Plan. While the cash audit and other independent reviews of our activities indicate GWA's overall effectiveness, the GAO audit of the Financial Report of the U. S. Government has a disclaimer. GAO reports that this is a function of inconsistent agency reporting, numerous disclaimers on agency financial statements, FMS' compilation and consolidation process, and intragovernmental reporting differences.

Evidence: FMS consistently receives an unqualified audit opinion of the Schedule of Non-entity Assets, Non-entity Costs, Non-entity Custodial Revenues, and the Schedule of Non-entity Government-wide cash. IT audits, 300B audits, continuity of operations reviews, and other program reviews are routinely performed on the applications developed to support the Government-wide accounting mission. The GWA program is considered part of the Federal Government's critical infrastructure, and the program's proven day-to-day performance is essential to hundreds of other Federal programs in managing the Federal Government's cash and tracking the Federal deficit. Additionally, the Federal Accounting and Standards Advisory Board (FASAB) is currently in the process of determining whether to reduce disclosure requirements for the Financial Report of the U.S. Government. This potential FASAB exemption for the Financial Report would eliminate the majority of GAO's findings relating to conformity with FASAB disclosure standards.